Sterling falls ahead of Hammond's economic update

LONDON, March 13 (Reuters) - Sterling slipped on Tuesday as traders shied away from taking out big positions ahead of U.S. inflation data and a half-yearly update on the public finances from the British finance minister.

Philip Hammond is expected to announce an improvement in the country’s slow economic growth outlook in the run-up to Brexit while stressing that his priority remains to ease the pounds in public debt.

“The spring statement will burden of Britain’s 1.7 trillion be the focus today. In terms of the implications for the pound, it will be limited,” said Lee Hardman, an analyst at MUFG, while adding that an upgrade to economic growth could “at the margins be supportive” for sterling.

With Britain stuck in negotiations with the European Union to try to agree the terms of a transition deal to cover the period after it leaves the bloc, Brexit continues to overshadow other influences on the pound.

The junior Brexit minister Robin Walker said on Monday that Britain was very close to agreeing the details of the implementation period with the EU for its transition out of the bloc. Britain is due to leave in March 2019.

Renewed concerns about the state of Brexit talks after the EU rejected some British proposals for a trade deal last week have weighed on the pound in recent weeks, as has a recovery in the dollar.

Sterling fell 0.2 percent to $1.3879 as the dollar pushed higher.

A focus for investors is the U.S. CPI data due at 1230 GMT. Median forecasts by economists polled by Reuters point to annual core CPI inflation of 1.8 percent in February, which would be flat from January.

Against the euro, sterling dropped 0.1 percent to 88.85 pence per euro.

Societe Generale’s Kit Juckes said Hammond’s statement, due at 1230 GMT, had been downgraded from a “major event to a mere speech”. The euro versus sterling remained “stuck in a range”, he said. (Reporting by Tommy Wilkes Editing by Alison Williams)